Marcel Arsenault, with a long track record of highly successful real estate ventures during the past three decades, has quietly launched what may be a one-of-kind homebuilding company. The predecessor company, Homebuilder Capital Solutions, generated $200 million in revenues last year, ranking it in the top 50 homebuilders in the country by that metric.

The newly branded company, elacora is just now being unveiled to the public. The websites for elacora was launched in mid July and it expects to have two Denver communities open by March or April of next year.

In the Denver area, Arsenault expects that elacora will be building 100 to 200 homes annually. In addition to Denver, elacora is building in San Francisco, Ventura County in California and Florida.

$100 million investment

The company plans to invest $100 million in for-sale housing this year.

The homes in Denver will primarily be aimed at the first-time move-up buyer, said Arsenault, founder of Louisville-based Real Capital Solutions, which has more than $1 billion in assets under management.

Arsenault is bullish on housing, expecting prices to rise an average of 6 percent to 8 percent annually through 2017. It is building homes in the Wheatlands area in southeast Aurora and in Riverdale Peaks in Brighton. It is about two weeks away from buying lots in Thornton. COhomefinder considers Wheatlands a “hot” neighborhood.

It is looking at 700 to 1,000 lots in the Denver metro area.

The homes also will be built sustainability and will come with a solar option.

“We are very big believers in solar,” Arsenault said. “We started by putting solar panels on our headquarters in Louisville and have since put them on a number of schools and hospitals.”

Right now, we are bidding on a $100 million solar farm in California,” he said.

Arsenault said elacora is like no other home builder in the U.S., as far as he can tell.

Its business model is to team up with a seasoned homebuilder and provide all of the financial tools it needs, including debt, equity , marketing and administrative and accounting services.

“There are a lot of great homebuilders who are not so great at getting loans from banks,” Arsenault said

Knowing your strengths

“Our business model is to team up with great local builders,” he said.

“They build in the field, they know the local building codes, they know and understand the markets. We provide the capital and the corporate expertise,” he said.

Arsenault said he knows of no other builder like elacora. “We haven’t found one, at least,” he said. “The closest thing we have found is five or six smaller builders might get together and form a separate company with the different entities under one corporate roof,” he said.

“Frankly, that model hasn’t worked so well,” he said.

Housing consultant S. Robert August agreed that elacora is a one-of-a-kind builder.

“Right now, I don’t know anybody else who is doing what Marcel is doing,” said August, principal of North Star Synergies.

Housing SWAT team to the rescue

“He finds guys who are down and out and goes in with a SWAT team of experts to shore up any areas where they are coming up short,” August said.

“His model is very smart, very clever,” August added. “He has surrounded himself with some very bright people.”

The CEO of elacora is Brian Paul, a former top official with Pulte Homes.

“I think [the Denver housing market) is awesome,” Paul said.

“It’s a very vibrant market,” he said. “The market is coming back with the economy. And there is a shortage of resale homes, which has increased demand for new homes.”

In the Denver area, elacora has teamed up with Jay Piper, a former president for Capital Pacific Homes in Colorado. Piper also has served as a division president for Richmond Homes, which is owned by Denver-based MDC Holdings.

Piper also served as the corporate controller and division chief financial officer for Richmond Homes.

“Jay is exactly the kind of guy we want to be a partner with and is very indicative of the partnerships we want to create at elacora,” Paul said.

He said the $200 million in revenues is only part of the homebuilding side of elacora, which he said is a “very complicated” company. For example, the company also buys, entitles and sells land, he said.

Challenges ahead

Paul, however, said the new homebuilding business faces challenge in Denver and nationwide.

“The industry is coming back at the U.S. economy heals, but it is coming back in a different way than after any other recession,” Paul said. “We are trying to figure out, just as the bigger guys at the large publicly traded companies are trying to figure it out,” Paul said. The advantage elacora has is “that we will not grow for the sake of growth. Everything we do will be very strategic. We will be very careful not to become over-extended.”

Nationally, Arsenault said that the industry is building about half as many homes as it needs to meet demand.

“There are going to be some pockets of resistance,” Arsenault said. “For example, interest rates are going to rise and rising interest rates are not good for homebuilding,” Arsenault said.

“Rising interest rates will definitely be a headwind, but it will eventually be overcome by the need of people to buy homes,” he said.

Arsenault is no stranger to housing.

In 2009, Arsenault bought Denver-based Village Homes and sold it in 2012 for $21.9 million.

During the Great Recession, he also was snapping up distressed condominiums in places like Florida.

While Arsenault gave his first in-depth interview on elacora to InsideRealEstateNews.com last Friday, it has been flying under the radar for almost a year. Records at the Colorado Secretary of state show it was registered in Colorado in October 2013.

Arsenault was not always so sanguine about homebuilding.

In 2005 and 2006, like New York-based hedge-fund titan John Paulson, Arsenault saw the collapse of homebuilding coming. He sold millions of square feet of commercial real estate and aggressively shorted, that is, he betted against, homebuilding companies.

“While that bus has long gone, I made some pretty big short bets on housing in 2005 and especially in early 2006,” he said.

“Those turned out to be very good calls,” Arsenault said. “But I turned bullish on real estate in 2009,” Arsenault said.

“I short things when they are stupid expensive and I go long when they stupid cheap,” Arsenault said, although he admitted the low-hanging housing fruit has been plucked.

“Today, the homebuilding industry is reasonably priced,” he said.

A rose by any other name

So why is his company’s name elacora?

“It is hard to get an interesting sounding name that is not already in the consumer space, so we had to make one up,” Arsenault said. “It has a good ring to it, but it doesn’t really mean anything. As we grow the brand, people will become more familiar with elacora.”

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John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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